Auditor says state exchange on track

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The California state auditor issued a report on the forthcoming state health-insurance exchange Thursday, saying the program appears on track to open for business as scheduled in a little more than 10 weeks.

Then there's the question of whether the exchange, called Covered California, will be financially sustainable over the long term. That answer must wait until after enrollment begins Oct. 1.

The program's future solvency “remains uncertain,” state auditor Elaine Howle wrote in the 47-page report. “Because of this potential financial challenge, we are adding Covered California's operations to our list of high-risk issues that the State faces.”

The exchange was created under the 2010 Affordable Care Act. Covered California will feature 13 private insurers offering qualified health plans to those who don't have it or can't afford it. Poorer residents may be eligible for federal subsidies.

Covered California says as many as 5.3 million state residents could qualify for coverage under the program, and the exchange is ramping up marketing and outreach efforts. Coverage under the health plans begins Jan. 1.

The auditor says the exchange's outreach plans “appear to be more than adequate,” and its governance and oversight also “appear adequate.” But she urged an independent audit to analyze financial controls.

Anthony Wright, executive director of Health Access California, a consumer-advocacy group based in Sacramento, says the state exchange faces challenges. “But it seems to be on track, which is impressive, given the scale of what it's trying to do in a real short amount of time,” he said.

Many observers say the key to the program's long-term success will be enticing enough young, healthy Californians to buy insurance, offsetting the cost to provide care to older, sicker policyholders.

Wright said more of these “young invincibles” would buy insurance if they had jobs that offered coverage. He said more than 400,000 people have used an existing provision of ACA to be included on their parents' plans until age 26. Between the subsidies, their own interest in buying insurance on the exchange, and their parents' interest, “that will be helpful,” he said.

A message left on the media line at Covered California's offices late Thursday was not returned.

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